It’s not often I find myself in complete agreement with The Guardian and the Liberal Democrats but I do today. The Blair government’s decision to stop the Serious Fraud Office’s investigation into suspected Saudi/ BAe corruption is, as Oliver Kamm writes in today’s Times, the lowest of many low points of this Blair government. According to The Guardian the SFO were about to get hold of a Swiss dossier that contained print-outs of BAe’s recent offshore banking transactions with key Saudi middlemen. The Guardian continues:

"The SFO believed the banking files could unlock the answer to three questions: Were members of the Saudi royal family receiving secret British pay-offs? Were offences committed under UK law? And had BAE lied to the Department of Trade and Industry to get insurance cover when the company recently claimed it had cleaned up its act and got rid of its confidential Saudi agents? But the events of the next 48 hours ensured that the SFO would not be allowed to collect those files. Instead came a sudden harsh lesson in the realities of power and politics in Blairite Britain."

Here are a few reasons why I object to Attorney General Lord Goldsmith’s decision to halt the SFO investigation:

Tory Dominic Grieve said that “On the basis of the Attorney General’s comments about the highly speculative nature of the inquiry, and that any final prosecution was unlikely, the decision to discontinue the investigation in view of the potential damage to our national security was inevitable and the only sensible course of action." I’m sceptical that Lord Goldsmith made his decision for entirely legal reasons. The Attorney General has ‘form’ in terms of giving legal advice and it is clear from all reports that the Foreign Secretary, Defence Secretary and Downing Street were all involved in the lobbying/ decision-making process. The Prime Minister declared himself responsible for the decision. This was clearly politicised. The SFO should have been permitted to conclude its investigation without political interference.

Saudi Arabia recently warned that the Eurofighter contract with Britain was at risk if the SFO investigation went on. The Saudis know that the British establishment is weak. They prevented Death of a Princess from ever being rebroadcast and they have now appeared to succeed in blackmailing Britain over an SFO investigation.

The worst reason for surrendering to Saudi blackmail was that we needed support from the desert kingdom for the war on terror. If we had continued with the SFO investigation there were warnings of no more intelligence sharing and, worse, Saudi support for Sunni fighters in Iraq. What kind of signal does this send to every Muslim nation? Threaten to join the wrong side in the war on terror and you’ll get what you want.

If Saudi Arabia is an ally in the war on terror then God help us. This is the nation that has funded the most militant expressions of Islamism all around the world. The kingdom’s human rights abuses include execution of homosexuals and zero tolerance of conversion from Sunni Islam. No Jews of any nationality are permitted to enter Saudi Arabia.

There is terrible hypocrisy here. It is a core of UK development policy that African and other developing nations must have zero tolerance of corruption but it now appears that the British state is willing to turn a blind eye to Saudi corruption.

If Labour comes out of this affair badly then so do the Tories. Dominic Grieve’s line is unbelievable. MPs Gerald Howarth and Michael Jack – both with big BAe-related constituency jobs – lobbied to stop the investigation. Edward Leigh defended the decision on Any Questions – joining Charles Moore and Peter Oborne in embracing the Government’s ‘realpolitik’. Bernard Jenkin told the BBC that "The SFO should not be tempted to go on these fishing expeditions unless prosecutions are likely and these prosecutions are in the national interest." Worst of all was Jonathan Aitken’s suggestion that even if the allegations against BAE were true, it was the correct decision to end the investigation in order to maintain good relations with Saudi Arabia. I hope the human rights charity Christian Solidarity Worldwide is reconsidering having Mr Aitken as their president.

Final word must go to ‘Russell’ who made this brilliant comment on Danny Finkelstein’s blog:

"The rule of law having been dismissed, and the public interest having been equated with the Government’s interests (for which Blair takes "full reponsibility"), the Attorney General can now step in to halt the cash for honours enquiry. Not in the public interest, you see. While we’re at it, why not arrest DC Yates for conduct prejudicial to national security?"